Christine Stuart photo
Gov. Dannel P. Malloy speaks to reporters Friday at the Convention Center during the Connecticut International Auto Show. (Christine Stuart photo)

(Updated 2:13 p.m.) Connecticut will join New York, Massachusetts, Rhode Island, and Vermont in deciding not to allow insurance plans canceled under the Affordable Care Act back into the marketplace.

“The truth is the solution offered a week ago by the president doesn’t work in Connecticut,” Democratic Gov. Dannel P. Malloy said Friday.

President Barack Obama offered last week to allow plans that didn’t comply with the Affordable Care Act back into the marketplace for a year, if states agreed.

Malloy said insurance companies have already told the state that it doesn’t plan on continuing policies that already are slated to be replaced.

“The insurance companies have made it clear that the policies they have not extended, they are not going to extend,” Malloy said. “They’ve also made it clear some people have misinterpreted the information that’s out there and not renewed when they could have. And they also pointed out a lot of people who could renew have renewed.”

According to a fact sheet distributed by Malloy’s administration, there are 108,287 individuals with 66,437 individual policies in Connecticut. Of the policies, 27,876 have been renewed, leaving 38,561 policies that will not be continued in 2014, either by choice or because policyholders weren’t given that option.

Malloy said that even if the insurance companies decided to renew those plans, “we know that rates on those plans would increase significantly this year, and again next year.”

After President Obama’s attempt last week to make good on an often-repeated pledge that consumers who like their insurance plans could keep them, America’s Health Insurance Plans’ President and CEO Karen Ignagni said changing the rules now could destabilize the market.

“Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace,” Ignagni, head of the national trade association for the health insurance industry, said. The danger is that if “fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase in the marketplace and there will be fewer choices for consumers.”

In order to help give residents time to transition to a plan on Connecticut’s exchange, Malloy said he would push the enrollment deadline from Dec. 15 to Dec. 22 for anyone who wants to be insured starting on Jan. 1. He also said Access Health CT, Connecticut’s exchange, will work closely with private carriers to make sure they reach out to residents who may lose their insurance as a result of these changes.

Plans offered through the exchanges are much richer plans, in some cases, than plans currently offered in the individual market because the Affordable Care Act spells out what types of benefits need to be covered.

Malloy said part of the sticker shock people are experiencing is that they’re comparing a policy underwritten 16 months ago to a policy underwritten now to start Jan. 1.

“Very different pricing,” Malloy said.

In a letter to the Malloy administration, the Insurance Department said the rates on these policies being canceled under the Affordable Care Act would rise 15 to 25 percent depending on age, gender, and geography.

“In a number of cases, a policy owner keeping his or her current policy would experience higher premium costs as well as much higher cost sharing for fewer benefits,” a memo from the Insurance Department reads. “Further, these policy owners, if eligible due to income, would not be able to take advantage of the federal price subsidies that are available through policies offered by Access Health CT.”

It goes onto say that after conversations with insurance carriers about whether they would avail themselves of Obama’s proposal, “the simple answer is that they would not.”

Insurance carriers told the department that in some cases they gave customers a chance to renew their non-exempt plans and some individuals may still have a few days to take advantage of that offer.

According to a graph compiled by the Insurance Department, Aetna canceled 57 policies and Anthem, the state’s largest insurer, canceled 15,000. ConnectiCare and United Healthcare didn’t cancel any plans.

Keith Stover, a lobbyist for the Connecticut Association of Health Plans, said they’re pleased with the Malloy administration’s decision.

“They came up with the right answer for Connecticut,” Stover said.

He said that looking at allowing these plans back into the marketplace would have a created “a degree of chaos that wouldn’t have been an advantage to consumers.”

But there are those who do want to keep their plans.

Republican lawmakers have called for a special session to fix a Connecticut law that would allow these plans to be offered for another year.

House Minority Leader Lawrence Cafero said the decision means there are about 70,000 individuals who will lose their coverage on Jan. 1. The Insurance Department says 38,601 residents would lose their policies.

“State government owes its citizens the assistance and clarity to understand how they can protect themselves and their families,” Cafero said in a statement.

Senate Republican leader John McKinney, who is also running for governor, tried to convince Malloy to convene a special session to change Connecticut’s law so that the policies could be renewed.

“I am disappointed by Governor Malloy’s decision today,” McKinney said.

He said the decision ignores the fact that these policies being canceled represent real people, who likely will have to pay more for their coverage if they don’t qualify for a subsidy in the exchange or forgo insurance. 

“Tens of thousands of people in Connecticut are going to lose their health insurance this year because of Obamacare and Governor Malloy’s decision,” McKinney said.

Republican Party Chairman Jerry Labriola Jr. said Democrats who supported Obamacare “lied” when they assured the American public they would be able to keep their health plans and now “thousands of Connecticut’s hardworking families are seeing their healthcare plans cancelled.”

Instead of making sure residents can keep their plans as promised, Malloy is “doubling down on Obamacare and abandoning the Connecticut families who are being stripped of their healthcare coverage,” Labriola said.

Democratic lawmakers and insurance carriers supported the decision.

“Though the need for some modifications may develop, a wholesale change to our system in Connecticut would likely cause unnecessary harm,” House Speaker Brendan Sharkey said.

Anthem, the state’s largest insurance company which canceled 15,000 policies, applauded Malloy’s decision.

“We believe it is important to stay the course, in the interest of the longer term viability of our products both on and off exchange, with our current strategy for plan changes,” a spokeswoman said in a statement.